,Amazon is accused of artificially high price-setting, which is no small problem – for them, and for vendors.
Tempting as it seems, having products show up in a quick search on Amazon’s site appears as an unbelievable opportunity. With exposure as an ever-growing challenge, sales platforms such as Amazon have catered to online merchants and offered a venue with unprecedented visibility. Selling on Amazon seems like a dream come true, until the dark side of the Seattle-based behemoth emerges.
Now here’s that dark side. Amazon controls your pricing. Yes, that’s correct. If you want to change what you charge for your products, Amazon can punish you by reducing exposure through search functions. Worse, they can compel sellers to raise pricing on identical products if they also sell on competing sites such as Walmart.
An antitrust analyst has made a compelling case for federal review, and the Federal Trade Commission is paying attention. They have signaled an interest in investigation.
The State of Washington already obtained a legal victory that partially prohibits the non-competitive feature, but the platform is finding ways around that. It disposed of the “Sold by Amazon” program name, but in name only will not end other variations of the practice. Amazon paid a $2.25 million fine in January 2022, but in relative terms, that is a pittance.
California has also zeroed in on Amazon for its monopolistic policies, filing a federal antitrust suit in September 2022 challenging merchant agreements. The company has not publicly responded to California’s lawsuit, and it will be interesting to see if this one puts teeth into the Washington action.
The problem unfolds in a way that sellers have virtually no control. Obviously, it’s a boon to have access to the expansive reach of the largest e-commerce site in the world. But if the offset is to be locked into pricing policies or face relative invisibility, you have lost the benefits of using Amazon. The Catch-22 is a persistent issue facing both smaller and mid-sized retailers who are struggling to find market share.
Surely there is a way to find middle ground. Will high-profile platforms ease up on small sellers and institute a more fair way to accommodate them? Stay tuned. And look for independent marketing strategies in the meantime.
They didn’t name it Amazon for nothing.
As if the king of all internet retailers hasn’t dominated enough sectors, it’s now among the top platforms for advertising. There are good reasons for that, and none of them should be a surprise.
Just as Facebook took the social media world by storm, effectively lining out competitors, Amazon is well on its way to becoming the premier commerce player of all time. Aside from negative press surrounding unfortunate stories of porch package thefts, their rep is quite stellar, even as they creep toward a quasi-monopoly territory that has retailers concerned.
And why not? Eclipsing the 600 million product mark in 2018, it seems there isn’t much you can’t find on the popular site. Add to that two-day delivery with its Prime feature, and you have a massive cabal of captive targets. More than 300 million of them, to be exact.
This is where you come in. Whether or not you use Amazon as a sales platform, you should be giving serious consideration to its advertising feature. Not too much of a departure from Google Ads, Amazon creates a seamless search function for site users to locate a product. Sponsored posts appear at the top, designated as such in a subtle way. That puts your offering front and center to a consumer directly searching for it on a favorite portal.
It’s a new year, and a new chance to evaluate your strategies as an ecommerce player. Maybe you’ve noticed the proliferation of ecommerce giant Amazon.com, which is quickly becoming the Microsoft of the computer sector. Amazon CEO Jeff Bezos is determined to dominate the online sales market by expanding offerings and by snatching up ancillary entities such as delivery services.
What does this mean for you? More opportunities. And approaching the Amazon sales model is always a wise choice; by all accounts, they are the venue of choice, surpassing even eBay for vendors of new merchandise. Ecommerce experts estimate that 2 million sellers sold more than 1 billion items on Amazon in 2015. That number is expected to escalate quickly.
Amazon’s sea of opportunity is competitive. There’s no getting around that. If you’re peddling goods that are not custom-made, it’s likely you’re going up against other sellers who may be larger and selling at volume, or smaller and willing to accept a lower profit margin.
All of this means you’ll want to keep an eye on your bottom line—your pricing. The most customer-friendly policies and business model in the universe won’t lure pure price-shoppers away in many cases. This doesn’t mean you should be forced to undersell yourself, but just to make sure you’re offering a deal you can live with.
Enter Amazon “repricing,” or a tool Amazon uses to push their own branded and sponsored merchandise above yours. They scan pricing for like items by using automated analytics software, and reduce their pricing accordingly. Does this put you at a disadvantage? Yes. Is it insurmountable? No. Why? Because you also have access to that strategy.
There are several apps and programs out there that allow you to track pricing of the goods you sell on Amazon. You may adjust pricing the minute Amazon does, and also monitor your third-party competitors.
To honor the start of a new year, we’ve identified four tech companies that we expect to make a huge impact in the retail space in 2018.
Amazon is seemingly at the center of the Internet, but for up-and-coming entrepreneurs aiming to put a product in customers’ hands as soon as possible, there are young companies that are working to make retail tasks less intimidating.
Get ready for another significant development in the world of ecommerce. In what may be an inevitable move across platforms and functions, a marriage between social media apps and online retailing is taking shape.
You’re already familiar with the dominant entity Amazon, a pioneer in harnessing the Internet’s reach and turning it into a multi-billion dollar business that involves re-selling, and only re-selling. Since its 1994 start as primarily a bookseller, it has reached the epicenter of mass global selling. It is the Walmart of ecommerce.
And now it sports a tentacle aimed at luring the busiest corner of the internet: social media.
Think of the time and energy spent on creating the online store of your dreams. Web design, categorization, ordering functions, payment processing— it’s an uphill climb, but once it’s done and you’re actually a player in the online retailing business, you can feel like a million bucks.
That’s why may seem counter-intuitive to hand off some of your sales and marketing functions to a third party. Independence was your goal, so stepping backward feels awkward, right? Not necessarily— not if that third party is an e-commerce giant that can boost your bottom line.
Now in its 22nd year, Seattle-based Amazon.com is the largest online retail entity in the United States. With its own rather amazing story— Amazon has yet to turn a profit despite its wild popularity— its reach into American homes (and those around the world in separate retail companies) is astounding.
In part due to strategic and creative features such as Amazon Prime, a membership-based offering, Amazon commands an enormously loyal customer base. The company continually expands benefits available to Prime members, including a subscription to television and film content, and music streaming, plus free 2-day shipping.
Put simply, Amazon has done the work for you as it widens your exposure in ways you never dreamed possible. It boasts an estimated 85 million unique viewers every month. Why wouldn’t you jump on board as a seller?
Compare it to another high-volume sales platform: eBay. Originally launched as a venue for collectors and small-time peddlers to off-load wares, it has grown into an online presence nearly dominated by wholesalers and retailers. And while its early days featured items for auction only, all sellers are given the option to list merchandise for straight sale. But unlike Amazon, eBay customers are less attached to that platform as a brand. Amazon users are familiar with its layout and comfortable with the ability to conduct accurate, efficient searches.
Those searches are a hot selling point for e-commerce vendors, but the beauty of using Amazon as an alternate platform is its dominance in internet search engines. Plug in a product name to a Google page, and chances are excellent that the first retailer popping up will be Amazon. If you happen to be pitching an item in that category, your challenge just became easier.
Amazon’s base offerings are usually proprietary. But vendors selling the same products—new or used— are treated to a teaser feature on the product’s main page. In this image, you’ll notice active links that take shoppers to the same item available from Amazon sellers:
Should a buyer choose to venture beyond Amazon’s offering, they will find a list of vendors offering the same product, rated for condition, price, and shipping options. This is your opportunity to sneak in as a viable option for discerning customers.
While price appears as an enticement, the beauty of Amazon is its focus on features over costs. In general, Amazon shoppers value reliability and selection over bottom-basement pricing. Their objective is to find a quality product at a decent price, and experience seamless purchasing and delivery. This is good news for sellers who want to avoid branding as a cheap discount outlet.
There are practical pluses to choosing Amazon over eBay, including the ability to load bulk listings more quickly, and to bump up your prices just a bit over what you will sell for on your site. Naturally you will want to factor in the fees handed over to Amazon once you do make those sales. Their fee structure is complex and varied, and you will want to study each option to find which—if any —works best for you.
Another important point is performance. Yours, not theirs. Amazon is far more aggressive in monitoring quality and shipping time, soliciting input from customers and featuring product and vendor reviews on the listing page. The reviews are more in-depth, and are longer, than the cursory eBay feedback windows. This can be a blessing for those who are confident in what they sell and how they move their product from warehouse to the customer’s home.
Finally, nothing beats the fulfillment of building a clientele that may never have found you were it not for your decision to take advantage of a mammoth e-commerce presence like Amazon. Your reputation gets a boost by proxy, and customers looking for niche products just may fall in love with your individual store if you make their buying experience a pleasure.
Don’t take our word for it. Ask around, hop online to explore on your own, and go straight to the source. Amazon is happy to offer primers that will walk you step by step into their fold. Should you decide to jump on board, and your experience is ultimately positive, there’s no reason you can’t maintain a dynamic online presence while padding your sales volume through affiliating with the King of E-Commerce.